In April’s Bryt Insight, we highlight some encouraging research, surrounding the potential for data centres to provide flexibility to support the grid, and the financial benefits of the UK’s journey to net zero. As well as this, we cover the new rules that will soon be implemented in line with the Future Homes and Buildings Standards, and the upcoming availability of plug-in solar PV.

You can find out about these updates, alongside other milestones in renewable energy and sustainability, in this month’s Bryt Insight. Read more below:

The ongoing conflict in Iran and the surrounding region is continuing to have a significant impact on the UK’s energy market. As a result, short-term wholesale electricity prices saw fluctuations, whilst remaining high throughout the month of March.

Qatar produces 20% of global supply of Liquefied Natural Gas (LNG)¹. The near-effective closure of the Strait of Hormuz, which Qatar’s LNG exports pass through, has therefore meant that the vast majority of this LNG supply has been unable to leave the region.

Whilst the UK is less reliant on LNG than the rest of Europe, due to gas supply from the North Sea, the UK is still heavily impacted by the interconnected global energy market. Constrained LNG supply has had a significant impact in increasing mainland Europe’s electricity prices and, as Europe’s energy market is so closely linked to the UK’s energy market, their higher wholesale electricity prices have contributed to the UK’s increased prices.

In mainland Europe, coal has been used to fill the gap left by the lack of LNG supply, with carbon allowance prices being lower due to recent political intervention to reduce them, following pressure². This tempered the cost of electricity from reaching even higher levels.

Long-term wholesale electricity prices saw a similar trajectory as short-term prices, being heavily impacted by the conflict in the Middle East. As well as the closure of the Strait of Hormuz, there has been significant damage to the LNG processing facilities in the region. This will likely have long-term impacts on the amount of LNG that can be processed and will therefore impact future availability supply, even after the LNG can be transported again.

Prices for the nearer seasons – the next 18 months – has seen the most significant increases, but long-term wholesale electricity prices have also increased further into the future. This is due to concerns around longer term availability of supply and the impact on processing facilities.

There has been significant damage and impacts on communities and infrastructure across Iran and the surrounding regions. This has also meant that energy infrastructure and producing facilities have been heavily damaged. As a result, even if the ceasefire agreed on 8^th April becomes permanent, global energy market prices may still be impacted for the foreseeable future by low supply levels.

Beyond the impact of this conflict, April has had a windy start, which may cause short-term wholesale electricity prices to decrease, due to increased wind energy generation boosting supply levels. However, this impact may be short-lived, depending on upcoming weather conditions.

Looking further ahead, gas, nuclear and hydro power plants will see planned maintenance periods staggered throughout the summer. However, as long as there aren’t any unplanned power outages, these maintenance periods are not likely to have a significant impact in driving wholesale electricity prices upwards. This is because they have been planned for, and electricity demand is expected to be lower in the summer, due to reduced demand for heating.

Prices for Renewable Energy Guarantees of Origin (REGO) certificates have remained low, continuing the trajectory reported on last month.

National Grid and their partners have conducted the UK’s first trial of AI grid technology, in which they adjusted the power of a cluster of data centres in real time. The trial found that the data centres’ electricity demand decreased by over a third in less than a minute – without disrupting any essential operations.

The key results of the trial included:

• Peak smoothing – reacting to periods of increased demand on the grid by reducing electricity usage in the data centres, helping to balance supply and demand.
• Long-duration shifting – reducing their electricity demand for up to 10 hours, in order to help balance the grid when renewable energy supply is low.
• System management during simulated system stress events, which resulted in shedding the data centres’ demand by 30% in around 30 seconds, and therefore providing stability to the grid.

The recent increase in data centres being built, which are also generally seen as having a consistent, fixed electricity demand, has caused concerns about increased electricity demand on the grid and extended grid connection times. In fact, a recent study has suggested that emissions from data centres could be far higher than the Government has estimated³, if gas is used to meet any of their electricity demand. To mitigate this risk where possible, the trial’s findings provide an important reminder that data centres have the ability to flex their power according to the grid’s demand. This means that they can help to balance demand and supply, whilst supporting the growth of AI and helping to facilitate increasing amounts of renewables on the grid.

With the UK preparing to add more than 6GW of data centre deployments to the grid by 2030, this technology could help to provide over 2GW of flexibility when required.

To read more about the trial’s findings, visit here⁴.

In a recent report released by the Climate Change Committee (CCC), costs and energy security were tested against different decarbonisation scenarios. The study was released just following the start of the conflict across Iran and the Middle East. It found that a single fossil fuel price spike, of a similar magnitude of the 2022 energy crisis, would create a cost that is greater than the price of the UK’s pathway to achieving net zero, year-by-year.

The journey to net zero was found to be more cost-effective than continuing to rely on fossil fuels in all scenarios explored, providing improved long-term energy security from investment in the energy transition. Some of the report’s findings include:

• For every pound spent on the journey to net zero, the benefits were found to outweigh the initial cost by 2-4.1 times.
• Energy losses are 50% lower in a net zero scenario, compared to today’s levels, with renewables requiring less input to meet the same level of energy demand.
• This scenario would see real health and wellbeing benefits alongside this, including cleaner air, warmer homes, and more active, healthy lifestyles (due to more sustainable modes of transport).
• These co-benefits could provide £2 billion-£8 billion per year by 2050, through improved health outcomes.

Whilst concerns about the cost of investing in net zero has been prominent in the current political climate, this research demonstrates that the cost of inaction is much higher than of transitioning to a low-carbon society. In the current geopolitical landscape, investing in renewables will be essential in helping to increase energy independence and protecting the UK from steep price increases.

You can find out more about the CCC’s findings, here⁵.

The UK Government has recently announced that new rules will be implemented to align with the Future Homes and Buildings Standards (FHS/FBS), where both new-build domestic and non-domestic properties in the UK will be mandated to be built with on-site renewable generation. This will mostly consist of rooftop solar PV, alongside heat pump installations for homes (powered by electricity to replace traditional gas boilers), and better insulation. The rules also include measures to ensure that a ‘reasonable amount’ of roof space is to be covered by solar panels, with 40% of the building’s floor area required to be covered.

Alongside these new rules, the Government has announced that plug-in solar will soon be available to purchase⁶. These panels could be used on balconies and in gardens to reduce electricity usage from the grid, as a more accessible alternative to installed rooftop solar PV. They are already popular in mainland Europe, and the UK Government has estimated that their usage could save individual British households £70-£110 per year.

The new regulations to houses and non-domestic buildings will apply to those that are built from March 2028 onwards, helping to ensure that these buildings are fit for a decarbonised future. You can read more about this update, here⁷.

UK Government’s new consultation aims to reduce grid connection backlog

The UK Government has launched a public consultation that aims to reduce the wait associated with grid connections. Through prioritising projects that are ready to be connected to the grid, the National Energy System Operator (NESO) has already reduced the grid connection queue by more than half, but there’s still more progress to be made in the lead-up to the Government’s Clean Power 2030 Action Plan targets.

NESO now intends to use this new consultation to tackle ‘speculative applications’, which describe non-viable projects that apply, without being ready to be connected, therefore delaying connection for other projects. The Government states that these applications have significantly contributed to a dramatic increase in the queues for connections – a 460% rise in 6 months. To address this, the Government intends to prioritise connecting strategically important projects to the grid at a quicker rate, such as AI data centres, EV charging hubs and electrified industrial sites – projects that will help the UK to meet its Clean Power 2030 Action plan and bring economic value.

If you’re interested in learning more, visit here⁸.

51% of the UK’s planned infrastructure investment will be dedicated towards energy projects

The National Infrastructure & Service Transformation Authority (NISTA) has recently released their Infrastructure Pipeline report, sharing their ten-year forward look into investment into the UK’s infrastructure. In it, they have revealed that 51% of the total £725 billion of public funding for the next ten years will be dedicated towards improving the energy system.

This funding includes investment in renewable energy projects and infrastructure, such as £25 billion that will be dedicated towards Scotland’s offshore wind. These investments will help the UK to meet its decarbonisation targets and support a resilient, efficient energy system. As well as these benefits, the investment could generate 621,000-697,000 annual skilled jobs over the next two years, and 629,000-706,000 annual skilled jobs over the next five years.

With the previously mentioned long-term benefits of achieving net zero, it’s positive to see the UK continuing to invest in a future that is powered by renewables. To find out more about this update, visit here⁹.

UK Government will help to fund over 600 flood management schemes across the UK

The Department for Environment, Food and Rural Affairs (Defra) has confirmed that they will provide £830 million for 600 flood management schemes in England, across 2026 and 2027. This funding will help to ensure that homes and businesses are protected in cases of extreme weather such as floods, with flood defence projects and initiatives helping to repair, maintain and upgrade existing infrastructure.

This announcement makes up part of the wider £1.4 billion that the Government intends to invest in flood defences. With the UK expected to experience more of these types of extreme weather events as one of the effects of climate change, it’s positive to see the Government taking steps to protect households and businesses against future risk.

To read more about this news, visit here¹⁰.

The UK’s first geothermal renewable energy project is now operational

The first geothermal energy plant in the UK is now operational and connected to the grid. This type of renewable electricity works by heating water using the Earth’s naturally hot mantle, which turns into steam and spins a turbine to generate electricity. Unlike other renewable sources, this geothermal plant can provide a continuous source of electricity and is therefore a reliable generator for the grid.

The plant is located in Cornwall, and has been in development for nearly 20 years. The electricity generated will be used to heat homes and businesses, and will produce enough to power the equivalent of 10,000 homes. The project will also provide the UK’s first domestic supply of lithium, which is a mineral that is important in key technologies driving the energy transition, such as Battery Energy Storage Systems (BESS).

To read more about this milestone, visit here¹¹.

40% of Ireland’s utility-scale solar is now delivered by Statkraft

Following two new solar projects being connected to Ireland’s electricity grid, Statkraft now provides over 40% of Ireland’s utility-scale solar – 560MW out of 1.3GW. The new projects have been energised in recent weeks, and include Clonfad, a 174MW project located in Westmeath, and Irishtown, a 32MW project outside of Dublin. This milestone demonstrates Statkraft’s instrumental role in Ireland’s growing energy security and home-grown renewable electricity.

Both of these new projects will also provide a Community Benefit Fund to the local community¹², within a year of the projects being live. You can find out more about this exciting milestone, here¹³.

Statkraft’s first solar project in Wales has secured planning consent

Statkraft have secured planning consent for its very first solar project in Wales. Alleston Solar Farm, a 30MW scheme, will be able to power the equivalent of 14,000 homes, and is located between Lamphey and Pembroke. Throughout the development of the project, Statkraft has been engaging with local communities, with early engagement consultation events in Pembroke in 2023. Construction will start in 2028 and, when the project reaches completion, it will provide improved local biodiversity to the area, a new orchard and hedgerows, amongst other environmental benefits, and will deliver a Community Benefit Fund while it is operational.

This milestone for Statkraft will also be an important contribution to the UK’s ambitions in this area, as part of their solar targets for 2030. You can find out more about this update, here¹⁴.

If you have any questions about how these updates might affect you or would like to find out more, our team of experts are happy to provide further insight. You can contact them on 0330 053 8620 or here.